Green energy owes much of its rapid growth in the U.S. over the past decade to state laws requiring utilities to obtain a share of the electricity they sell from wind, solar and other carbon-free sources. Now Google wants environmentally minded but energy-hungry corporations to give green power an added push.
The search giant today proposed that regulators allow utilities to sell clean power to big industrial consumers through what it calls a renewable energy tariff. Such tariffs, widely used in Europe and elsewhere, usually include a premium to cover the higher cost of solar and wind power, which is passed on to all a utility’s customers. Under Google’s scheme, only power-hungry customers, like data centers, would pay the tariff. In exchange, they’d be guaranteed that the money is going towards creating new sources of renewable energy.
Geeky stuff. But here’s why it’s important. As utilities achieve their state-mandated renewable energy targets, they’re signing fewer new supply deals, which means fewer new big solar and wind projects are being built. In California, for instance, the number of power purchase agreements for renewable energy has dropped sharply over the past two years. Expect even fewer deals when a federal tax credit for renewable energy projects drops from 30% to 10% at the end of 2016.
A renewable energy tariff for big corporate customers could encourage the construction of new wild farms and solar power stations. Data centers are energy hogs and consume around 2% of electricity production in the US and about 1.5% globally.